Silver Gains Slightly, Weak Dollar Supports
Silver prices saw limited positive movement on Friday (June 12th), with XAG/USD hovering around US$67.7/oz. Silver is still trying to maintain a recovery bias after the previous sharp pressure, although the market is starting to grow more optimistic about the prospects for a US-Iran peace deal.
Geopolitical sentiment is a key factor. Reports of discussions on a memorandum between Washington and Tehran have helped ease market concerns, but have not completely eliminated risk. The Iranian nuclear issue remains elusive, and talks are said to continue after the initial signing. Furthermore, there has been no clear commitment from Iran regarding the management of the Strait of Hormuz.
For silver, easing geopolitical risks typically reduce demand for safe-haven assets. However, this time, this pressure was offset by a weakening US dollar. The DXY (DXY) traded around 99.75, making dollar-based precious metals more affordable for non-US buyers. This effect has helped silver remain resilient even as risk appetite begins to improve.
US consumer sentiment data also provided mixed signals. The University of Michigan Consumer Sentiment rose to 48.9 in June from 44.8 in May, better than expected. One-year inflation expectations fell to 4.6%, while five-year expectations fell to 3.4%, providing some relief from longer-term inflation concerns.
However, interest rate pressures have not disappeared. Inflation and energy prices remain key risks if the US-Iran deal fails or the Strait of Hormuz is disrupted again. In such a scenario, Fed policy expectations could harden again, putting pressure on non-yielding precious metals, including silver.
Currently, silver is in a stabilization phase. Factors to monitor include the certainty of the signing of the US-Iran memorandum, the status of the Strait of Hormuz, the direction of the US dollar, oil prices, and the Fed's signals. As long as the dollar remains weak, XAG/USD still has short-term support, but upside room could be limited if risk-on sentiment continues to strengthen. (arl)
Source: Newsmaker.id
